"Become one with the market, and decode if stocks are reacting to the past as opposed to the future."
Chew on this for a little while: What has sent stocks higher in the front portion of the week? It's the September data, which arguably reflect the market's rally right into the Federal Reserve announcement. Let that sink in for a second. I am concerned that the fear that crept back into markets post-Fed, plus a greater understanding of the issues at hand following the election, will not allow October to be a giant stock fest, as is being pumped into the heads of investors today. I have one word for this rule of thumb: #fail
"Is a pullback in the stock of a best-in-show company really a buying opportunity?"
, an opportunity for what? Is it to lose on both sides of the coin -- on fees and stock-price direction? Honestly, though -- against this backdrop, if a stock that you happen to own cedes ground due to something in the earnings release, it's probably not a near-term buying opportunity. After all, this means there is a lack of data to reason the fundamentals will strengthen by the next earnings report.
Oh, yes, I think companies are being analyzed these days more with a top-down focus. If a company is operating well, a rebound in the global macro picture will benefit it disproportionately. But when we are swimming in a sea of choppiness, the stock will go down or notch meager rises that prevent a comfortable night's sleep.
At this point, I will continue along with a generally bearish opinion on the external environment as a baseline for selecting stocks. Disaster stories are favored shorts and get me excited, and longs have to have an "it factor" in order to make the risk worthwhile. Rifling off 60 stock ideas a month into a vortex ain't my thang, and to that I offer no apologies.
- I have been on VF Corp (VFC - Get Report) since the middle of the year, and the silly weak quarter from Wolverine Worldwide emboldens that call. On the watch list: Jones Apparel (JNY)
- Tiffany's (TIF - Get Report) current price levels worry me. This leaves the stock susceptible to downside into a third-quarter earnings announcement -- and guidance for the holiday season -- that should be less than stellar.
- On July 30, I stood outside in some light rain with my pal Debra Borchardt and trumpeted the virtues of owning Swift Transportation (SWFT - Get Report) for the long term. If you bought, sell into strength, because I'm not feeling transport comments -- such as those from CSX (CSX) -- pertaining to operating ratios, sales mix and fuel inflation recovery.